Diving deep into the history of US dollar and Kazakh tenge dynamics

US dollar Kazakh tenge dynamics
Photo credit: Kazinform

This April, the tenge exchange rate showed strengthening, growing by 1.1% and reaching 442.05 tenge per US dollar, according to the National Bank of Kazakhstan. In parallel, the average daily trading volume on the Kazakhstan Stock Exchange during this period increased from 225 to 234 million US dollars, while the total turnover amounted to 5.1 billion US dollars. According to the National Bank the current average rate for the American dollar stands at 441,66 tenge. However, the dynamics of the exchange rate have changed a lot throughout the years. Kazinform News Agency correspondent dives deep into the history of the exchange rate in Kazakhstan: from the day of gaining independence to April of 2024.

Kazakhstan gained its Independence from the Soviet Union on December 16, 1991, despite this ruble being in use for a while. The exchange for the new, national currency began on November 15, 1993, which marks the day of the national currency and is celebrated annually. The National Bank of Kazakhstan posts yearly review of the exchange rates since 1993, according to them, in 1993 USD stood at the average of 5.225 tenge.

In the later years the dynamic took a turn, with the USD average growing from 35.64 in 1994 to 78.30 in 1998. The 1999 exchange rate stood at 119.52, which also marks the year of the first devaluation. Kazakhstan had to reduce the value of tenge to other currencies, because of the external factors as was described by the government. The change was sudden and unexpected: currency exchange rates went from 88 tenge to 150 tenge in just two days.

However, in the period of 2000 until 2008 tenge gradually strengthened and stabilized going from 142.13 to 120.3, respectively. The 2008 world financial crisis, triggered by the mortgage crisis in the United States, characterized by bank collapses, plummeting stock values, affected Kazakhstan as well as many other countries in the world.

The second devaluation hit Kazakhstan in 2009, which the National Bank attributed to the decline in oil prices, devaluation of national currencies in Kazakhstan's trading partner countries, as well as the need to preserve the regulator's foreign exchange reserves. In a span of few hours exchange rates went from 120 to 170, finding stability with the yearly average of 147.5.

Before the third devaluation in 2014, tenge was stable with the rates of 147.5 to 154.04 in the period of 2009 to 2013, respectively. Third devaluation, also known as ‘black Tuesday’ forces tenge to jump from 155 to 180, with the year average of 179.19 in 2014.

The last and latest devaluation took place in August of 2015, during which the yearly average summed up to 221.73, subsequent to the National Bank's declaration of adopting a freely floating tenge exchange rate. Following the exchange rate adjustment in August 2015, there was a notable spike in prices for imported goods, resulting in domestic inflation and an expected reduction in both purchasing power and real incomes for the populace.

The period of 2016 to 2019 showed the results of 342.16 to 382.75. Then, hit by the COVID-19 pandemic in 2020 tenge drops to 412.95, with further negative projections of 460.48 in 2022. In 2023 and 2024 the average exchange rates show the numbers of 450, with the latest standing at 441,66 on May 5, according to the exchange rates by the National Bank.

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